Prime-Tass English-language Business Newswire
April 6, 2006 Thursday 7:09 PM EET
Gazprom inks deal to freeze gas price for Armenia, buy assets there
MOSCOW, April 6 (Prime-Tass) – Russia’s natural gas monopoly Gazprom
has signed an agreement to freeze its natural gas price for Armenia
at U.S. $110 per 1,000 cubic meters until January 1, 2009 and to buy
natural gas and electric power assets from the Armenian government,
Gazprom said Thursday.
Under the agreement, Armenia’s natural gas monopoly ArmRosgazprom,
which is affiliated with Gazprom, will buy the fifth generator of the
Hrazdan thermal power plant from the Armenian government, Gazprom
said. The plant’s four other generators are owned by Armenia’s
government and managed by Russia’s electric power monopoly UES. The
plant has an annual capacity of 1,100 megawatts.
Additionally, Gazprom is expected to increase its stake in
ArmRosgazprom to “a qualified majority” from the current 45%, Gazprom
said in both press releases. The Armenian government also holds 45%
in ArmRosgazprom, while Russian independent gas producer Itera holds
10%.
The agreement is considered preliminary. Gazprom said that by April
14 it plans to sign other preliminary purchase deals, which will
elaborate on the current agreement.
Under the agreement, Gazprom’s acquisition of the assets must be
completed by January 1, 2007, Gazprom said.
Gazprom also retracted Thursday an earlier press release, which said
that under the agreement, ArmRosgazprom is expected to buy a gas
pipeline between Armenia and Iran from Armenia’s government, and
published a “revised” press release, which referred to “Armenian
natural gas assets” without mentioning the pipeline.
In the retracted press release, Gazprom said that ArmRosgazprom would
buy a 40-kilometer stretch of the Iran-Armenia pipeline, which is
currently being built, and would also order the construction of
another, 197-kilometer stretch of the pipeline.
Earlier this month Gazprom hiked its gas price for Armenia to $110
per 1,000 cubic meters from $56 per 1,000 cubic meters.
Gazprom used to subsidize gas exports to former Soviet countries but
has recently hiked gas prices for Ukraine, Moldova, Azerbaijan and
Georgia.
The move followed the pro-Western “color revolutions” in Ukraine and
Georgia in 2003-2004, which soured their relations with the Kremlin.
Gazprom said earlier that its gas prices for former Soviet countries
would be constantly revised depending on the market situation.
Gazprom is also in talks on increasing its gas price for Belarus next
year, which was believed until recently to be exempt from price
hikes, being Russia’s closest ally.
Last year Gazprom exported 1.7 billion cubic meters of gas to
Armenia.